Newsletter · · Ashutosh Agarwal

FDA Clears Faster Path for Nicotine Pouches as Zyn Wins Modified Risk Label - Vice & Wellness: Alcohol & Nicotine - Week of July 15, 2026

Vice and Wellness (alcohol and nicotine) newsletter for the week of July 15, 2026. The FDA cleared a faster path for legal nicotine pouches and vapes and granted 20 Zyn products a modified-risk label, handing British American Tobacco and Philip Morris a concrete catalyst, while alcohol's decline accelerated with wine falling further, a Pernod Ricard and Brown-Forman merger collapsing, and a Beer Institute economist arguing Gen Z is broke rather than sober.

Vice & Wellness: Alcohol & Nicotine

Week of July 15, 2026: FDA Clears Faster Path for Nicotine Pouches as Zyn Wins Modified Risk Label

Nicotine moved back to the center of the conversation this week, and it did so on the bulls' terms: regulators handed the reduced-risk crowd a genuine gift, and Zyn got a stamp it has wanted for years. On the drinks side, the mood went the other way. The numbers did not just stay bad, they got worse, a much-hyped whiskey mega-deal fell apart in public, and the people who study this category for a living are quietly telling each other to stop waiting for a rebound. Underneath it all, one debate keeps sharpening: are people really quitting alcohol, or are they just broke?

TL;DR

  • Nicotine delivered real news, and it was good news for the reduced-risk names. The FDA now lets companies sell new vapes and nicotine pouches while their applications are still under review, and it cleared 20 specific Zyn products to be sold as officially lower-risk than cigarettes, a clean tailwind for British American Tobacco (BTI) and Philip Morris (PM), especially with roughly two-thirds of US vapes now illegal.
  • Alcohol's slide is speeding up, not leveling off. Over the past year beer is down 4.4%, spirits (including canned cocktails) down 4.6%, and wine down a brutal 8.9%, and a well-known beverage analyst is now predicting wine's drop this year will be even steeper than last year's, which was already "the worst year we all remember."
  • The whiskey deal of the year collapsed. Pernod Ricard and Brown-Forman confirmed, unusually and on the record, that they had been in merger talks, then walked away. It is a loud signal that almost nobody wants to put fresh money into spirits right now.

What's New

Nicotine takes center stage, and the regulator just tilted the board. Two shows put real money-moving news on the table. On Chit Chat Stocks: "Terry Smith's Perplexing Letter; Samsung's Monster Numbers; Checking In On Tobacco/Nicotine Stocks $PM $BTI" (Jul 10, 2026), the hosts read a Wall Street Journal line that "British American tobacco could be a big winner from recent changes to how the FDA will police smokeless nicotine products," explaining that the agency "issued guidance that effectively allows manufacturers to sell new vapes or oral nicotine pouches while their pre-market tobacco product application is being reviewed." In plain terms: before, a new pouch or vape had to wait, sometimes for years, for the FDA to finish reviewing its application before it could legally go on sale; now it can sell during the wait. That speeds legal products to shelves and squeezes the illegal ones. On top of that, "the FDA has authorized 20 specific Zyn nicotine pouch products to be marketed as modified risk," a rare, hard-won label that lets a company officially tell customers the product is less harmful than smoking. Both hosts landed on the same favorite: "the most attractive for me right now is B.A.T." at a price-to-earnings ratio of just 13 and a 5.3% dividend yield, versus Philip Morris at 26 times and 3.1%, and Altria (MO) at 15 times and 5.8% but "mainly combustibles" with no breakout new product. This is investor opinion, not company insiders, but it is the first genuine catalyst the reduced-risk complex has produced in weeks.

The legal-vs-illegal vape gap is the whole nicotine story. On InvestTalk: "Is India the Best Emerging Market to Invest in for 2026?" (Jul 10, 2026), host Justin Klein of KPP Financial (who owns Philip Morris) framed why the group still works even as smoking dies: PM is "the market leader in smoke-free products," with "41% of their sales last year" from non-combustible items like IQOS heated tobacco and Zyn pouches, and it "doesn't sell any cigarettes in the United States" anymore. The number that matters for the whole trade: "according to Jefferies, more than two-thirds of vape products in the U.S. are now illicit," which "means there's room for public guidance to allow for more vapes and smoke-free products to enter the market." And the runway is real: "the number of cigarettes sold in North America has fallen by a third since 2020." Put this next to the FDA change above and you get the bull case in one line: the government is slowly clearing legal reduced-risk products to take share from a black market that now controls most of the category.

Wine's decline isn't stabilizing, it's accelerating. On Liquid Assets: "RNDC, Brown-Forman for sale, and Uncle Nearest crashes out: the most important stories of 2026 (so far)" (Jul 14, 2026), host and beverage-industry analyst Bourcard Nesin recounted his own "bold prediction" for the year: that wine wouldn't just keep falling, but that "the decline will be greater than the decline this year." He noted last year's Nielsen data "showed a 4.5% decline in dollar sales for US table wine," then delivered the gut-punch: "this year was unimaginably worse than last year, which was the worst year we all remember." His advice to the industry was to stop hoping for a bounce: "you as a company need to internalize how terrible this market is and act accordingly and just know there's not going to be any parachute." Co-host Sarah added that suppliers are finally shifting from "we can't control these factors, so we'll wait it out" to "we need to actually be proactive," pointing to the "massive cuts that we're seeing in places like Diageo" as the industry, in a "messy way," accepting reality.

The whiskey mega-merger that died in public. In the same Liquid Assets episode, the hosts dissected the collapsed Pernod Ricard and Brown-Forman merger, remarkable mostly because both companies actually admitted the talks were happening. As Sarah put it, "that never happens. It's always your rote answer of we don't comment on rumors and speculation," yet here "their press releases had identical wording. They were identical." Nesin argued the deal "had to make so much sense" but couldn't clear the hurdle of "these two immensely wealthy families" and Brown-Forman's "insanely large" concentration of voting shares. The bigger read for anyone holding the space: real M&A interest has narrowed to canned cocktails, and "the valuations are surprisingly low" because "even if you're an alcohol company... do you really want to double down?" When would-be buyers won't deploy a billion dollars into beverage alcohol, that's a vote on where they think demand is going.

"Gen Z doesn't drink" gets called a "chart crime." The most useful counterpunch of the week came on Tapped In: "117: The Drive to Socialize: Why Beer Demand Is Stronger Than You Think (ft. Andrew Heritage, Beer Institute)" (Jul 14, 2026). Andrew Heritage, an economist at the Beer Institute (the brewers' trade group), took apart the viral chart showing older generations spending "seven to eight times more annually on alcohol than Gen Z." He called it "a chart crime": it only counts head-of-household spending, and "roughly half of Gen Z is below legal drinking age." Adjust it properly, compare each generation at the same young age, in today's dollars, and Gen Z spends "just a little over $500 annually on alcohol, the same amount that millennials and Gen X did when they were under 25." His conclusion cuts against the whole abstinence narrative: "maybe the thing with Gen Z isn't that they don't like drinking alcohol, but that alcohol, like anything else, costs money and they are broke and more financially stressed than other generations." His hard numbers: about "40 to 45% of Americans" have had a beer in the last three months, "stable the entire time I've asked this," and there's "no mass abandonment of any one particular category." The problem, he says, is that the number of drinking occasions is shrinking because consumers are stressed, made worse in the second quarter by gas prices that jumped "40 to 45%." The tell: every off-premise channel decelerated except one, dollar stores, where beer sales actually rose a full percentage point.

GLP-1s are quietly rewiring the restaurant check. On We Fixed It, You're Welcome: "Reshaping the GLP-1 Economy: A Breaking Consumer Study" (Jul 14, 2026), consumer strategist Lisa W. Miller, a former VP of Insights at Frito-Lay and PepsiCo, walked through her "GLP-1 Blueprint" report, built from surveying 6,500 US consumers and reviewing more than 30 studies. GLP-1s are the weight-loss and diabetes drugs like Ozempic and Zepbound. Her headline figure: "21% of U.S. households have at least one person using a GLP-1," a number that has "more than doubled since January 2025." The effect on drinking is direct: data from Circana shows users "ordering fewer sides, snacks, breads, and alcoholic drinks," and the National Restaurant Association "found that nearly half of users reported cutting back." The result is a squeeze hiding in plain sight: "the restaurants might be full, but customers are spending less." One striking data point for anyone modeling restaurant or beverage demand: across 60 restaurant brands she tracks, the share of current customers on a GLP-1 "ranges from 12% to 43%," and a new $50 Medicare copay that took effect July 1 could widen access further, especially among older diners.

The Debate

This week the podcasts argued the alcohol side hard from both directions, and, for once, handed the nicotine bull a clean point.

Bull, the shift is real and structural. The evidence keeps stacking. GLP-1s now touch one in five American households and are demonstrably pulling alcohol off the check (We Fixed It). Wine's decline is accelerating, not bottoming, and the people who study the category are telling each other to stop expecting a rebound (Liquid Assets). And the money young people used to spend at the bar is visibly moving elsewhere: on The Best One Yet: "'Diamond Discount': De Beers' secret deal. OpenAI's whispering office. Gyms vs Bars." (Jul 13, 2026), hosts Nick and Jack made the case that "gyms are replacing bars as the place to hang out on a Saturday night," citing Mintel data that "30% of Gen-Z consumers are spending more on gym memberships this year than last year." Their blunt framing: "the new competition for bars isn't nightclubs, it's gyms." On nicotine, the bull got a rare assist from the regulator itself: the FDA's move to speed legal pouches and vapes to market, plus 20 Zyn products cleared as lower-risk, is exactly the kind of policy tailwind the smoke-free-transition thesis needs.

Bear, cyclical and overstated, not generational. Andrew Heritage's Beer Institute data is the sharpest version of this case anyone has voiced in weeks. His point: there's "no mass abandonment of any one category," beer participation has been flat at 40-45% the whole time he's measured it. What looks like a permanent decline is really fewer occasions from a cash-strapped consumer getting hammered by gas prices, layered on top of a pandemic hangover (wholesale inventory-to-sales is still running at 1.6-1.7 versus a normal 1.3, meaning the whole chain, and consumers' own liquor cabinets, is still stuffed with product bought during Covid). Gen Z, adjusted for income, drinks about as much as every prior young generation did; they're "broke," not sober. On the nicotine side, the bear's usual worries, the flood of illegal vapes and the slow bleed of cigarette volumes, didn't get a strong voice this week, and the illegal-vape point actually cut the other way, since the FDA's crackdown is aimed at exactly that black market.

The Names in Play

British American Tobacco (BTI) is the clear beneficiary this week. The FDA's smokeless policy shift was framed as one where BAT "could be a big winner," and at 13 times earnings with a 5.3% dividend yield it was the pick of both Chit Chat Stocks hosts: "the most attractive for me right now is B.A.T." The next thing to watch is how quickly its pouch and vape products actually reach shelves now that they can sell during review.

Philip Morris (PM) owns the piece of news everyone wanted: 20 Zyn products cleared as modified-risk. It's still "the early leader in nicotine pouches" (though "losing a little share") and the runaway leader in IQOS heated tobacco across Japan and Europe, with more than 40% of sales now smoke-free. At 26 times earnings it's the priciest of the group, you're paying up for the cleanest reduced-risk story. Altria (MO), by contrast, was the laggard in the conversation: a 5.8% yield, but "mainly combustibles" and "hasn't really had a viral product." A smaller name worth a footnote: Haypp Group (listed in the Nordic markets), pitched on Chit Chat Stocks as an online marketplace for legally buying pouches and nicotine products, an indirect way to play pouch growth.

On the drinks side, the tone was defensive. Boston Beer (SAM) and Marc Anthony Brands keep coming up as the assets buyers want, but "they don't have to sell, so they don't. They're doing fine." Constellation Brands (STZ) drew a defense of its constant reinvention, "I would much rather be the company trying stuff," even as it "struggles at the moment." And Diageo's "massive cuts" were read as the clearest sign yet that Big Spirits has stopped waiting for demand to come back on its own.

Read-Throughs

  • Cannabis and THC drinks, the flip side of last week's ban scare. On High Spirits: "#144 - Betting Big on One Brand: Ohio's Market Leader w/ Zach Weprin (Certified)" (Jul 10, 2026), Ohio cannabis operator Zach Weprin described how his state has already "gotten in the way" of the loosely-regulated hemp-THC beverages that used to sell outside dispensaries, the exact category last week's podcasts warned could face a federal ban. The open question is whether those drinkers migrate into licensed dispensary THC drinks (which his company makes) or simply drift back to alcohol. His nuance is worth holding onto: substitution runs both ways, with "some [consumers] here trading back up to beer because they're at the bar." THC drinks are stealing occasions from alcohol, but not cleanly, and the regulatory ground under them keeps shifting state by state.
  • Non-alcoholic beer keeps buying its way into the culture. The Best One Yet closed its show by plugging Biro, the non-alcoholic beer co-founded by actor Tom Holland, with the hosts noting they went "sober for 2 weeks" before a live show and drank it to celebrate. It's a sponsor read, but it's also a data point: alcohol-free beer is now a normal, aspirational choice rather than a compromise, a slow tailwind for the Heineken 0.0s, Guinness 0.0s, and Athletic Brewings of the world.
  • Bars and restaurants, full rooms, thinner tickets. The recurring theme: the occasion survives, the spend shrinks. GLP-1 users are ordering fewer drinks (We Fixed It), Gen Z is protecting a smaller number of nights out, and gyms are eating into the Saturday-night wallet (The Best One Yet). On-premise operators feel the mix shift before the brewers do.
  • C-stores under pressure. Heritage's channel data flagged the convenience store as "especially hard hit" in the second quarter as gas prices spiked, a read-through for the beer sold at Couche-Tard, Casey's, and 7-Eleven forecourts, with dollar-store retailers grabbing the trade-down.
  • Distributors still reorganizing. RNDC's ongoing unwind remains a top-of-mind story, and Southern Glazer's continues to reposition away from pure wine and spirits: "if you're Southern Glazer, you're not doubling down on wine and spirits. You're like, I'm going to get into beer... why don't we get into soft drinks?" The middle of the supply chain is voting with its feet.
  • Illicit vape is the target, not the competition. With two-thirds of US vapes illegal (Jefferies, via InvestTalk), the FDA's faster-approval path is aimed squarely at converting that black-market volume into legal, taxed, branded sales, the single biggest swing factor for the reduced-risk names.

What Changed

The real update this week is nicotine returning to the conversation, and doing so on the bull's terms. The FDA handed the reduced-risk complex a concrete catalyst: legal pouches and vapes can now sell while under review, and Zyn landed 20 modified-risk clearances. That's the first genuine reason in weeks to revisit the smoke-free re-rating story, and it lands with BAT looking like the cleanest beneficiary.

On alcohol, the debate didn't just continue, it hardened. The question stopped being "is the decline real?" and became "how much worse does it get, and why won't anyone buy the assets?" Wine's drop is accelerating, a marquee whiskey merger collapsed, and even the deals that would make sense can't clear the bar. The best pushback, Andrew Heritage's "broke, not sober" data, is the most rigorous version of the cyclical case anyone has put on the podcasts this year. Whether he's right is now the whole ballgame: if the consumer is just stretched, this is a trough; if a generation genuinely drinks less, it's a slow-motion re-rating of the entire category.